Germany Deserved Debt Relief, Greece Doesn't(bloombergview.com)
bloombergview.com
Germany Deserved Debt Relief, Greece Doesn't
http://www.bloombergview.com/articles/2015-01-27/germany-deserved-debt-relief-greece-doesn-t-i5fdca2y
13 comments
> But TAARP was much larger than what the Greek bailout ever needed to be.
TARP was viable because buying up the "troubled assets" itself arrested the decline in their value and thereby interrupted (or at least mitigate) the positive feedback loop of the collapse.
Is the Greek crisis a similar positive feedback collapse with readily identifiable asset classes which could be targeted for a bailout purchase that would interrupt the feedback loop? (Serious question: I've seen a lot of reporting on the surface manifestations of the crisis, but not a lot of readily available information on the underlying fundamentals.)
TARP was viable because buying up the "troubled assets" itself arrested the decline in their value and thereby interrupted (or at least mitigate) the positive feedback loop of the collapse.
Is the Greek crisis a similar positive feedback collapse with readily identifiable asset classes which could be targeted for a bailout purchase that would interrupt the feedback loop? (Serious question: I've seen a lot of reporting on the surface manifestations of the crisis, but not a lot of readily available information on the underlying fundamentals.)
That's a good question, and one that I'm not in a position to answer.
However the greek economy is not just olive oil and tourism, but those sectors are huge [1]. The Greeks also export finished petrochemical goods, have (had?) the largest commercial shipping fleet, control flow through the Mediterranean (the islands). More importantly they can have a balanced budget if ppl negotiate in good faith.
[1] it annoys me when ppl disparage greece's "olive oil" sector. Olive oil, like greek agriculture in general is high value (see how much it sells for in Whole Foods). Greek olive oil isn't like Iowa potatoes, but more like California citrus groves.
However the greek economy is not just olive oil and tourism, but those sectors are huge [1]. The Greeks also export finished petrochemical goods, have (had?) the largest commercial shipping fleet, control flow through the Mediterranean (the islands). More importantly they can have a balanced budget if ppl negotiate in good faith.
[1] it annoys me when ppl disparage greece's "olive oil" sector. Olive oil, like greek agriculture in general is high value (see how much it sells for in Whole Foods). Greek olive oil isn't like Iowa potatoes, but more like California citrus groves.
The European GPD is slightly larger than the US, but it's important to note that it is larger.
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...
Noted and updated.
That's not surprising, though. Blaming a newly elected socialist government for all the country's faults. It's just a scare tactic. This happened in Quebec recently when the Parti Québécois (quite the varied political party, but at the time center left) was elected, after 9 years of Liberal government. The PQ was blamed by the liberals for everything and anything, but the PQ had just been in power some months in a whole decade.
Turns out the scare tactic worked, even pushed the Premier to hold elections prematurely, and government returned to Liberals.
Turns out the scare tactic worked, even pushed the Premier to hold elections prematurely, and government returned to Liberals.
Yes I remember it. But the PQ hardly did itself any favors.
I don't think they were any worse than the Liberals, especially given the time they had. Granted, Mme Marois had some PR troubles.
It's just too easy to say that "socialists will crash the economy, they have no idea what they're doing" when clearly nobody has any idea what they're doing.
It's just too easy to say that "socialists will crash the economy, they have no idea what they're doing" when clearly nobody has any idea what they're doing.
> But TAARP was much larger than what the Greek bailout ever needed to be. And the EU's gdp is larger than the US'
TARP paid itself off as the US economy is almost always a sure bet. The chances of the Greeks paying off their debt is pretty much zero. These are very different situations.
TARP paid itself off as the US economy is almost always a sure bet. The chances of the Greeks paying off their debt is pretty much zero. These are very different situations.
Are you sure the chances are zero?
Greece has made a lot of sacrifices over the past five years and could have a surplus, if not for the interest rate of the debt.
So restructure it like the German one was: long payment plan, low interest and payments dependent on exports. Then they'll pay it off too!
Btw, the interest payment is the reward for risk. The risk is default of the lender and inability to access credit for the debtor. German banks gambled badly, tough.
Greece has made a lot of sacrifices over the past five years and could have a surplus, if not for the interest rate of the debt.
So restructure it like the German one was: long payment plan, low interest and payments dependent on exports. Then they'll pay it off too!
Btw, the interest payment is the reward for risk. The risk is default of the lender and inability to access credit for the debtor. German banks gambled badly, tough.
It looks a lot more like the housing bubble to me, with banks loaning crazy sums to NINJA borrowers.
Or the recent muni bond default thing in the US where banks setup finance deals with unsophisticated and or corrupt local officials that they knew couldn't be paid for, and then wanted to keep the ordinary stiffs on the hook when it went sour.
Or the recent muni bond default thing in the US where banks setup finance deals with unsophisticated and or corrupt local officials that they knew couldn't be paid for, and then wanted to keep the ordinary stiffs on the hook when it went sour.
The Marshall plan was preceded by the Morgenthau plan which would have destroyed Germany's ability to ever create war again, reducing Germany to subsistence level farming. The Allied occupiers actually began destroying the German infrastructure, but it didn't work out however as Europe's economy had historically depended on Germany's industrial base and America and Western Europe needed to counter growing Soviet power in the first beginnings of the cold war.
It other words it had nothing to do with "deserved", Germany was rebuilt out of strategic necessity to face two looming threats to international stability and peace.
It other words it had nothing to do with "deserved", Germany was rebuilt out of strategic necessity to face two looming threats to international stability and peace.
I'm currently playing my first game of Diplomacy. Anyone with the slightest interest in world politics should play it once. It's teaching me more about how the world works than 2 years of reading The Economist (sadly canceled due to lack of time).
I now associate a feeling and experience to the words "strategic necessity".
I now associate a feeling and experience to the words "strategic necessity".
Greece can't afford the debt so the only possible solution is to default. But Europe is using all it's available power to threaten Greece to prevent it from defaulting. Expecting a population to put up with a generation of depression is ridiculous and it's not going to happen. When Detroit defaulted it wasn't kicked out of the dollar and people were still allowed to move to other parts of the country.
I think the problem with "forgiving" the debt is that 1. someone is going to pay for that debt, the debt that is owed to someone is on their balance sheet as (rapidly declining) value they possess. That is the debt doesn't magically disappear, someone has to pay for it one way or the other. 2. Those in position to pay that debt fear Greece is just a bottomless pit that they'll be "forgiving" debt for a long while to come since Greece's social programs aren't sustainable and there aren't any indicators that Greece's economy will grow fast enough to support them. The problem isn't just debt that's owed now, but the money Greece will owe in the future (and can't pay) given Greece's situation.
People that are going to have to pay for Greece's problems don't just want an end to Greece's current problem just to fall into the same trap soon here after, lurching from one crisis to another. I think that's a pretty fair concern to have.
People that are going to have to pay for Greece's problems don't just want an end to Greece's current problem just to fall into the same trap soon here after, lurching from one crisis to another. I think that's a pretty fair concern to have.
This points to the real problem. When Greece was originally "bailed out" in 2010 what actually happened was that the debt was moved from German and French banks to EU taxpayers. The banks were paid in full by the EU and IMF for all the bad debt they had made. But capitalism cannot work that way, when lenders make a bad loan they're supposed to take the losses, that's how interest rates are set. If they can lend without any risk then the whole market gets out of whack.
On your point #2, Greece has been running a primary surplus for several years now, meaning the government takes in more than it spends before debt payments.
On your point #2, Greece has been running a primary surplus for several years now, meaning the government takes in more than it spends before debt payments.
Say you're a homeless junkie multiply convicted of petty theft. Then say I lend you 20$, with 50$ due a year hence. Who made a bad decision? And who's going to be surprised I haven't got my money back in a year?
I don't think it's as simple as that with Greece, but obviously at some point creditors need to bear the risk as well. It can't be an "always win" situation for them, and I don't think it has been. Question is where to draw the line?
I don't think it's as simple as that with Greece, but obviously at some point creditors need to bear the risk as well. It can't be an "always win" situation for them, and I don't think it has been. Question is where to draw the line?
On the other hand, that asset on their balance sheet was returning a higher rate due to risk that Greece might someday have to default...
As I mentioned in another post the article is insulting for us Greeks because it is historically inaccurate. At one point the author mentions “There are ruins at the center of Athens, too, but they are rather more ancient”. This is utterly inaccurate. Germans literally left Greece in ruins. The following is a report written in 1946 for the Greek government that describes the extend of the destruction.
http://www.truth-out.org/speakout/item/24456-the-math-of-mas...
http://www.truth-out.org/speakout/item/24456-the-math-of-mas...
As an Italian, I am embarrassed by the lack of sympathy and support my government has shown for you. As German allies we must accept our responsibility for the destruction and famine left in our wake.
But let me congratulate you on a second Oxi day. I love your country, and I hope to return there next year!
But let me congratulate you on a second Oxi day. I love your country, and I hope to return there next year!
We hold no grudge against you guys. Italians treated our people quite nicely during the war and besides we share a common heritage that permeates millennia.
We also hold no grudge towards Germans either. For decades they visit Greece each summer for vacations and we treat them as we treat every other guest to our country. It’s just that they always look down to us with contempt. For them we’re the lazy pricks who drink ouzo and lie on the beach all day. Even Merkel herself called us lazy. And then it bothers them when we say they’re all Nazi descendants. If you want our respect you have to give it first.
We don’t want no debt relief or whatever. All we want is a viable agreement that will not tank the economy further and lead more young people to unemployment. You give us that and we’ll repay everything. Simple as that.
We also hold no grudge towards Germans either. For decades they visit Greece each summer for vacations and we treat them as we treat every other guest to our country. It’s just that they always look down to us with contempt. For them we’re the lazy pricks who drink ouzo and lie on the beach all day. Even Merkel herself called us lazy. And then it bothers them when we say they’re all Nazi descendants. If you want our respect you have to give it first.
We don’t want no debt relief or whatever. All we want is a viable agreement that will not tank the economy further and lead more young people to unemployment. You give us that and we’ll repay everything. Simple as that.
Well said.
Good luck.
Good luck.
[deleted]
I feel like existing debt is a bit of a red herring in discussion of the crisis. Yes, Greece has a lot of debt, but as a consequence of the previous bailout, that debt has very long maturity and low interest, so it doesn't actually cost that much to service.
The actual issue is that Greece has a huge primary deficit (and always has). Germany et all are disinclined to continue funding that deficit forever, which is entirely understandable (why should German taxpayers pay for both German and Greek services?) This is the actual problem. Writing off the existing debt does nothing to solve this.
The actual issue is that Greece has a huge primary deficit (and always has). Germany et all are disinclined to continue funding that deficit forever, which is entirely understandable (why should German taxpayers pay for both German and Greek services?) This is the actual problem. Writing off the existing debt does nothing to solve this.
Hasn't Greece been running a primary surplus for >18 months now?
Second Greek bailout included a €100bn haircut.
From Wikipedia: "EU Member States would also pass on to Greece all profits which their central banks made by buying Greek bonds at a debased rate until 2020. Private investors accepted a slightly bigger haircut of 53.5% of the face value of Greek governmental bonds,[10] the equivalent to an overall loss of around 75%."
From the article: "The Federal Republic of Germany's creditors -- 20 countries including Greece -- indeed agreed at a London conference to write off 55 percent of the country's 32.3 billion Deutsche marks of foreign debt."
From Wikipedia: "EU Member States would also pass on to Greece all profits which their central banks made by buying Greek bonds at a debased rate until 2020. Private investors accepted a slightly bigger haircut of 53.5% of the face value of Greek governmental bonds,[10] the equivalent to an overall loss of around 75%."
From the article: "The Federal Republic of Germany's creditors -- 20 countries including Greece -- indeed agreed at a London conference to write off 55 percent of the country's 32.3 billion Deutsche marks of foreign debt."
This trend of submitting posts sniping at Greece\Germany is starting to get ugly and isn't really suitable for HN, can we please stop?
Why can't we instead just talk about how bad this article is? Is it necessary to hide everything that is disagreeable?
> Is it necessary to hide everything that is disagreeable?
It's disingenuous for you to imply that we want Divisive Political news hidden for it's disagreeableness.
Why cannot we disagree with it based on its relevancy to "Hackers" and "News" regarding hacking?
This isn't the forum to discuss Global Finance. It's not GloFi News, it's Hacker News.
What's so wrong with staying on topic?
Better yet: someone (me!) should write a Hacker News for politics and global finance, just as design-related topics have moved to other link aggregators.
It's disingenuous for you to imply that we want Divisive Political news hidden for it's disagreeableness.
Why cannot we disagree with it based on its relevancy to "Hackers" and "News" regarding hacking?
This isn't the forum to discuss Global Finance. It's not GloFi News, it's Hacker News.
What's so wrong with staying on topic?
Better yet: someone (me!) should write a Hacker News for politics and global finance, just as design-related topics have moved to other link aggregators.
>Why cannot we disagree with it based on its relevancy to "Hackers" and "News" regarding hacking?
Of course you can, that usually starts another chain of yes-it-is/no-it-isn't but you surely can; it's not what GP did though.
Of course you can, that usually starts another chain of yes-it-is/no-it-isn't but you surely can; it's not what GP did though.
I am just tiring of seeing politics articles laden with rhetoric whose sole purpose is to provoke. They are not constructive, insightful or at this point even interesting. You suggest that there is some merit in a "let's discuss how bad the article is" discussion, but I think that's a wee bit of a stretch. The article disappeared fairly quickly anyway so it looks like I wasn't alone in thinking this way. Another reason I posted the comment instead of downvoting was that I can't downvote stories yet (I've only ~1200 karma), after seeing countless versions of these articles pop up I thought I'd add my $0.02 via a comment.
I think that provocative articles and comments often inspire really good retorts/comments as opposed to more well-balanced articles, at least sometimes.
Yeah, the blatant inflammatory baiting rhetoric sucks and I am happy to downvote those comments, no matter what their alignment is. I hope that's enough to discourage it. I do see flare-ups of partisan hackery from time to time, but I think batting it back down with comment voting and the occasional polite reminder works well.
>The article disappeared fairly quickly anyway
So it's not much of a problem then.
>I can't downvote stories yet (I've only ~1200 karma)
If there is an amount of karma that allows you to downvote sumbissions, it's more than 6743. I can flag them, is that what you mean?
Yeah, the blatant inflammatory baiting rhetoric sucks and I am happy to downvote those comments, no matter what their alignment is. I hope that's enough to discourage it. I do see flare-ups of partisan hackery from time to time, but I think batting it back down with comment voting and the occasional polite reminder works well.
>The article disappeared fairly quickly anyway
So it's not much of a problem then.
>I can't downvote stories yet (I've only ~1200 karma)
If there is an amount of karma that allows you to downvote sumbissions, it's more than 6743. I can flag them, is that what you mean?
Ah so maybe there isn't any downvote functionality for the articles themselves
I thought the upvotes define what is "suitable" for HN.
My comment was added because I didn't feel a down vote was enough to convey what I thought, and actually I cannot even down vote on articles as my karma isn't sufficient :)
Nope:
https://news.ycombinator.com/newsguidelines.html
This is basically 'politics' as can be seen from the flamey comments already being posted.
https://news.ycombinator.com/newsguidelines.html
This is basically 'politics' as can be seen from the flamey comments already being posted.
It won't stop because there are lot of angry leftists (mostly Europeans) who are upset that Greece might actually be forced to pay its bills and what that means for the welfare state model the EU has built itself on. So they snip from the sidelines about nazis, war, banks, conspiracy theories, etc that has nothing to do with the subject at hand. Greece is something of a canary in the coalmine here about Europe's leftist policies. The economic situation in other countries like Portugal, Spain, Italy, Croatia, Bulgaria, etc shows that there's a larger problem here. They don't want to pay their bills or cut services. They just want an endless gravy train and soon might suffer the same consequences as Greece.
Only the most wealthy, least corrupt, and productive EU states can have a proper welfare state and even some of them have problems with youth unemployment, job growth, low military spending, almost no defense against an expansionist Putin outside of the US Military (whose spending they are first to criticize), etc.
We're witnessing the end of the welfare state as we know it, and apparently a lot of Europeans can't handle that basic fact.
Apparently from the knee-jerk drive-by downvotes, they can't handle this comment as well.
Only the most wealthy, least corrupt, and productive EU states can have a proper welfare state and even some of them have problems with youth unemployment, job growth, low military spending, almost no defense against an expansionist Putin outside of the US Military (whose spending they are first to criticize), etc.
We're witnessing the end of the welfare state as we know it, and apparently a lot of Europeans can't handle that basic fact.
Apparently from the knee-jerk drive-by downvotes, they can't handle this comment as well.
Yeah this is all pretty wrong.
>> upset that Greece might actually be forced to pay its bills and what that means for the welfare state model the EU has built itself on.
1) Those aren't just Greece's bills. Steve Waldman put it best: "The European financial system was architected to make lending to Greece — and Spain and Portugal and Italy — a money machine for bankers with little career risk over a medium term. Sketchy credits tend to punch above their weight in terms of volume of issuance, so there was a lot of nice paper to buy. The bankers who lent to these states understood perfectly well that there was in fact a long-term risk, an uncertainty, a constructive ambiguity. They lent anyway, and took home very nice salaries and bonuses for doing so." (http://www.interfluidity.com/v2/5965.html)
2) This has nothing to do with implicating the welfare-state model; as you note, there are a ton of Euro welfare states with extremely robust economies. Some Euro welfare states have been chronically mismanaged (Greece, Italy, probably Spain) and now they're in trouble, in part for reasons not of their making.
>> Only the most wealthy, least corrupt, and productive EU states can have a proper welfare state
Oh, so in other words, if you take out Sweden, Denmark, the Netherlands, Germany, France, Norway, Finland, Belgium and Switzerland, the European welfare state is a total disaster, huh?
>> and even some of them have problems with youth unemployment, job growth, low military spending, almost no defense against an expansionist Putin outside of the US Military...
1) You know who else has problems with youth unemployment? The United States. Per the BLS (http://www.bls.gov/news.release/empsit.t02.htm), 16-19-year-old unemployment rate among white people was 15.7% in June 2015, and 31.8% among 16-19-year-old black people. THIRTY TWO PERCENT. But yeah, European welfare states are the only ones with a problem here.
2) US military spending is insanely high - we spend as much as the next 7 countries combined (http://pgpf.org/Chart-Archive/0053_defense-comparison). So it makes a certain amount of sense for Europe to throttle back their own spending a bit, though ideally they would spend more and we would spend much, much, much less.
>> upset that Greece might actually be forced to pay its bills and what that means for the welfare state model the EU has built itself on.
1) Those aren't just Greece's bills. Steve Waldman put it best: "The European financial system was architected to make lending to Greece — and Spain and Portugal and Italy — a money machine for bankers with little career risk over a medium term. Sketchy credits tend to punch above their weight in terms of volume of issuance, so there was a lot of nice paper to buy. The bankers who lent to these states understood perfectly well that there was in fact a long-term risk, an uncertainty, a constructive ambiguity. They lent anyway, and took home very nice salaries and bonuses for doing so." (http://www.interfluidity.com/v2/5965.html)
2) This has nothing to do with implicating the welfare-state model; as you note, there are a ton of Euro welfare states with extremely robust economies. Some Euro welfare states have been chronically mismanaged (Greece, Italy, probably Spain) and now they're in trouble, in part for reasons not of their making.
>> Only the most wealthy, least corrupt, and productive EU states can have a proper welfare state
Oh, so in other words, if you take out Sweden, Denmark, the Netherlands, Germany, France, Norway, Finland, Belgium and Switzerland, the European welfare state is a total disaster, huh?
>> and even some of them have problems with youth unemployment, job growth, low military spending, almost no defense against an expansionist Putin outside of the US Military...
1) You know who else has problems with youth unemployment? The United States. Per the BLS (http://www.bls.gov/news.release/empsit.t02.htm), 16-19-year-old unemployment rate among white people was 15.7% in June 2015, and 31.8% among 16-19-year-old black people. THIRTY TWO PERCENT. But yeah, European welfare states are the only ones with a problem here.
2) US military spending is insanely high - we spend as much as the next 7 countries combined (http://pgpf.org/Chart-Archive/0053_defense-comparison). So it makes a certain amount of sense for Europe to throttle back their own spending a bit, though ideally they would spend more and we would spend much, much, much less.
>> Only the most wealthy, least corrupt, and productive EU states can have a proper welfare state and even some of them have problems with youth unemployment, job growth, etc.
That's so true! While Romanian women (the etc. in your list of countries with problems) work 12 hours/day for $10, so cool, polite, wealthy, less corrupt teenagers in developed countries can have cool and cheap Che t-shirts.
That's so true! While Romanian women (the etc. in your list of countries with problems) work 12 hours/day for $10, so cool, polite, wealthy, less corrupt teenagers in developed countries can have cool and cheap Che t-shirts.
If your second last sentence is true, then you can't have monetary union. Break up the Euro.
This is also my opinion as well. A shared currency is just a bad idea and that's something the English realized early on, or at least the Thatcher administration did. Her 1995 book "Path to Power" pretty much predicted this situation.
England's realization was also assisted by Soros, so to say.
> Germany Deserved Debt Relief, Greece Doesn't
Consider the source of this article.
> Germany was much better positioned to put creditors' generosity to good use than is Syriza's Greece.
Some would say that Greece was subject to financial violence; hardly generosity.
http://www.huffingtonpost.com/john-perkins/economic-chaos-lo...
Consider the source of this article.
> Germany was much better positioned to put creditors' generosity to good use than is Syriza's Greece.
Some would say that Greece was subject to financial violence; hardly generosity.
http://www.huffingtonpost.com/john-perkins/economic-chaos-lo...
Does Syriza actually want debt relief? Judging from Varoufakis' interviews, he wants to implement policies that would foster economic growth, which would allow Greece to slowly pay back its debts. He claims the EU's proposals would further cripple the economy which would mean they will never be able to pay back its debt.
So it's not necessarily about debt relief, it's about which policies are most suitable for Greece.
So it's not necessarily about debt relief, it's about which policies are most suitable for Greece.
There might also have been another reason for forgiveness: who had destroyed West German cities and killed thousands of civilians to no great military effect in the process (hint: not the Nazis).
[deleted](1)
[deleted]
"Germany had brought it on itself, of course, but it was no longer ruled by the Nazis"
So when a country changes government we should just cancel their debts? The Nazis were democratically elected by the German people. Isn't it what democracy is about? Giving power and responsibility to the people.
Greece accumulated their debt by implementing shitty socialist policies, Germany by killing over 70 million people.
So when a country changes government we should just cancel their debts? The Nazis were democratically elected by the German people. Isn't it what democracy is about? Giving power and responsibility to the people.
Greece accumulated their debt by implementing shitty socialist policies, Germany by killing over 70 million people.
As much as I agree with the point you're making, the total number of casualties for WW2 is generally estimated at around 70 million people (sad to have to say that, but it's give or take). Needless to say that not all of those deaths were caused by Germany itself. Though you could argue that their actions got everyone involved and, as such, the war started.
Also, it's not as much the "shitty socialist policies" (whatever that means, since Greece was until fairly recently, ruled by a conservative party) but the fact that taxation has long been a problem there, leaving the coffers empty and abandoning a huge chunk of the economy to hand-to-hand payments, tax dodgers and overall fraudsters.
Also, it's not as much the "shitty socialist policies" (whatever that means, since Greece was until fairly recently, ruled by a conservative party) but the fact that taxation has long been a problem there, leaving the coffers empty and abandoning a huge chunk of the economy to hand-to-hand payments, tax dodgers and overall fraudsters.
"got everyone involved"
Heh, that's putting it lightly. They attacked everyone.
Heh, that's putting it lightly. They attacked everyone.
Well, the Japanese were in the attacking business pretty much, too... And sadly never accounted for their warcrimes....
The Nazis weren't elected. They never got anything close to a majority of the vote. They got a decent minority of the vote and then cheated their way to absolute power from there.
https://en.wikipedia.org/wiki/German_presidential_election,_...
"[Hitler] was appointed chancellor on 30 January 1933."
https://en.wikipedia.org/wiki/German_federal_election,_July_...
"They saw great gains by the Nazi Party, which for the first time became the largest party in parliament, though without winning a majority."
That's what democracy is about, the dictatorship of the biggest minority.
The constitution of the Weimar republic was crappy, but that's just how it was.
How did they cheat their way to power?
"[Hitler] was appointed chancellor on 30 January 1933."
https://en.wikipedia.org/wiki/German_federal_election,_July_...
"They saw great gains by the Nazi Party, which for the first time became the largest party in parliament, though without winning a majority."
That's what democracy is about, the dictatorship of the biggest minority.
The constitution of the Weimar republic was crappy, but that's just how it was.
How did they cheat their way to power?
Hitler being appointed Chancellor would have been unimportant if the rules had actually been followed, because the post of Chancellor had little power. However, not long afterwards the Reichstag was burned (quite possibly by the Nazis, but nobody knows who was really responsible) and the Nazis took advantage of the resulting environment of terror to seize power. The Enabling Act which gave Hitler absolute power was passed with a substantial number of legislators banned from participating, and the rest voted under explicit thread by armed Nazi troops.
> That's what democracy is about, the dictatorship of the biggest minority.
That's a notable failure mode of attempts to implement democratic ideals, but its definitely not what democracy is all about.
That's a notable failure mode of attempts to implement democratic ideals, but its definitely not what democracy is all about.
By "democracy" I meant "what today passes as democracy".
[deleted]
The Russians said they weren't going to pay Soviet debt and told everyone to get lost. So yes, this actually happens. Credit ratings fall, etc but that's it.
Having a few mega bombs probably help. I don't think it works out for some smaller countries
I guess what Germany went though can be described as complete change of the system (similar to Russia post revolution). Greeks merely elected a different government while keeping the system intact.
If they were taken over by the Troika who would do as they pleased, I imagine that would likely precipitate debt writeoff. The problem is that the Greeks want to keep things as they were / be forgiven the debt. That's mutually exclusive.
If they were taken over by the Troika who would do as they pleased, I imagine that would likely precipitate debt writeoff. The problem is that the Greeks want to keep things as they were / be forgiven the debt. That's mutually exclusive.
"The problem is that the Greeks want to keep things as they were"
I don't think that's true, if you remember that they just elected a very different party into government.
I don't think that's true, if you remember that they just elected a very different party into government.
I'm talking about things that led to the financial catastrophe:
Low productivity Entitlement system Patronage system etc
These may be nice things to have but they simply don't have the money to pay for them. The austerity they've felt has probably gone 1/3 of the way of what is needed (random guess - maybe more or less). And then they elected this new government because it was too painful.
I fully sympathize with their plight - it's similar to a nation going on unemployment after having a nice middle-class job. But there is simply no moral case that other EU members should be sponsoring their former lifestyle.
Low productivity Entitlement system Patronage system etc
These may be nice things to have but they simply don't have the money to pay for them. The austerity they've felt has probably gone 1/3 of the way of what is needed (random guess - maybe more or less). And then they elected this new government because it was too painful.
I fully sympathize with their plight - it's similar to a nation going on unemployment after having a nice middle-class job. But there is simply no moral case that other EU members should be sponsoring their former lifestyle.
Austerity is not the same as entitlement reform. Austerity is targeting a surplus regardless of the costs, which in this case tanked GDP faster than they could pay off debt, meaning the dept to GDP ratio got much worse.
Entitlement reform is an entirely separate thing.
And given that Syriza has, in fact, slashed pensions and raised the retirement age, they are clearly willing to do that. Since they are a new party dedicated to breaking with the past governance, they are also willing to embrace change. And since they won the election, this means the population gave them a mandate to do exactly that.
The old party, which was responsible for many of the entitlements in the first place, sure as heck wasn't willing to change Greece. Complaining about the new party seems strangely misplaced.
Entitlement reform is an entirely separate thing.
And given that Syriza has, in fact, slashed pensions and raised the retirement age, they are clearly willing to do that. Since they are a new party dedicated to breaking with the past governance, they are also willing to embrace change. And since they won the election, this means the population gave them a mandate to do exactly that.
The old party, which was responsible for many of the entitlements in the first place, sure as heck wasn't willing to change Greece. Complaining about the new party seems strangely misplaced.
I often see the trope that the nazi were democratically elected, but that either demonstrates a very poor understanding of history or is a deliberate misrepresentation.
Care to elaborate?
I suggest reading the Wikipedia article on the rise of the Nazi party [1] or doing a Google search [2], but here's the gist of it:
The Weimar Republic was very weak democratically and there were regular street battles between Nazis and Communists. The Nazi party got elected into parliament, but didn't have a majority. Still, Hitler was able to convince president Hindenburg to name him chancellor. After the Reichstag fire, most civil rights were suspended, effectively ending democracy. Most of Hitler's political opponents were arrested or removed from the Reichstag. Even so the Nazi party did not achieve a majority in the next elections. He then essentially intimidated parliament to grant him dictatorial powers in the Enabling Act.
[1] https://en.wikipedia.org/wiki/Nazi_Party#Rise_to_power:_1925... [2] https://www.google.com/webhp?sourceid=chrome-instant&ion=1&e...
The Weimar Republic was very weak democratically and there were regular street battles between Nazis and Communists. The Nazi party got elected into parliament, but didn't have a majority. Still, Hitler was able to convince president Hindenburg to name him chancellor. After the Reichstag fire, most civil rights were suspended, effectively ending democracy. Most of Hitler's political opponents were arrested or removed from the Reichstag. Even so the Nazi party did not achieve a majority in the next elections. He then essentially intimidated parliament to grant him dictatorial powers in the Enabling Act.
[1] https://en.wikipedia.org/wiki/Nazi_Party#Rise_to_power:_1925... [2] https://www.google.com/webhp?sourceid=chrome-instant&ion=1&e...
As far as I am aware, Greece and several other of the periphery Eurozone countries with similar debt crisis, accumulated their debt over time through a system of credit swaps developed as financial instruments by companies including J P Morgan and Goldman Sachs, to enable perifery EU countries to hide their borrowing to make it easier to appear to be inline with the rest of the Eurozone, which was fine until the crash and the tide went out.
If you were in a cynical and slightly paranoid frame of mind, it could even look like an economic attack on the Euro by US financial institutions.
If you were in a cynical and slightly paranoid frame of mind, it could even look like an economic attack on the Euro by US financial institutions.
http://www.spiegel.de/international/germany/from-dictatorshi...
And, for all syriza's faults (they're socialists :p), they're not responsible for the mess: they were never in power. Therefore, they were never corrupt or fed the system of clientism.
I don't like socialism, quite the contrary. But German banks made bad loans. German banks get bailed out by all EU governments, nationalizing their losses [1] German bank survive stronger than ever. Sounds more like a moral hazard [2] for the banks than free market capitalism to me.
1. ironically enough, Portugal, and All the other PIIGs, holds greek bonds because they bailed out German banks in a sign of "European solidarity".
2. It's easy to make money when you gamble with the House's money. In the US when (small[3]) banks fail, their assets are sold, their depositor's assets insured up to 100k and the system continues nicely.
3. I realize congress and friends chickened out with the "too large to fail". But TAARP was much larger than what the Greek bailout ever needed to be. And the EU's gdp is larger than the US'